Home Buyer's Regret? (perhaps coming in the next year or two...) (Houston: loans, houses)

[albert648]

Originally Posted by Threestep2

Old folks get to live in shoe boxes? Pls talk to me when you get there.

If affordability is an "issue", yes. We tell everyone else to move if they can't afford it, why do retirees get a pass?

There's also a massive middle ground between a shoebox and a 3500sqft McMansion.

[jiping]

Financially smart retirees will keep living in McMansion, collect rent from other investment properties, and have $$$$$$ in 401K account.

[TeamLynn]

Originally Posted by Wittgenstein's Ghost

Texas is a non-disclosure state, so the state does not have access to the sales price in the MLS. I would be very surprised if anyone ever buys a house and sees their taxable value raised to the actual purchase price the next year.

While the idea is technically correct, most Appraisal Districts do have access to the MLS.

They'll pull it up right there in front of you when you protest. So they are very familiar with sales prices.

[Wittgenstein's Ghost]

Originally Posted by albert648

If affordability is an "issue", yes. We tell everyone else to move if they can't afford it, why do retirees get a pass?

There's also a massive middle ground between a shoebox and a 3500sqft McMansion.

Not buying a new house that you can't afford is not the same as an elderly person having to move out of a house they have lived in for thirty years. Do we really want a system that forces 75 year olds to move out of their homes because they can't afford the taxes?

Keep in mind, this whole discussion is simply about whether or not it can create issues for elderly people. You don't think having to move out of your home is an issue?

[Wittgenstein's Ghost]

Originally Posted by jiping

Financially smart retirees will keep living in McMansion, collect rent from other investment properties, and have $$$$$$ in 401K account.

Right, so screw all of the people of modest means, huh?

[Wittgenstein's Ghost]

Originally Posted by TeamLynn

While the idea is technically correct, most Appraisal Districts do have access to the MLS.

They'll pull it up right there in front of you when you protest. So they are very familiar with sales prices.

How is this possible? I thought the legislature had addressed this previously and appraisal districts did not have MLS access?

[albert648]

Originally Posted by Wittgenstein's Ghost

Not buying a new house that you can't afford is not the same as an elderly person having to move out of a house they have lived in for thirty years. Do we really want a system that forces 75 year olds to move out of their homes because they can't afford the taxes?

Yes. What's the alternative? California's on the other end of the spectrum with Prop 13. No one can even get on the housing ladder in the first place because 1) overbearing government makes it impossible to build to begin with (no new supply), and 2) Prop 13 disincentivizes retirees who should be selling out and moving on from selling (supply through churn). No one forced anyone to do anything. Someone who owned a home for 30 years should be more than capable of foreseeing that property taxes can double in another 20 years.

Originally Posted by Wittgenstein's Ghost

Keep in mind, this whole discussion is simply about whether or not it can create issues for elderly people. You don't think having to move out of your home is an issue?

The issue is a self-inflicted one (not doing something about it when there's a resolution). A house, when fully paid off and rented out, is generally cash-flow positive provided it's not in a horrible location. They don't even need to sell the place, just rent it out and go rent something else. The rent income should be sufficient to cover the rent on the smaller place and the property taxes. Hell, take out a reverse mortgage on the higher appraised value for all I care. If all else fails, move to another lower cost of living state. I hear Florida's extremely popular among retirees, as are Arizona/Nevada. If they choose not to avail themselves of those options, what else can you do?

[jiping]

Originally Posted by Wittgenstein's Ghost

Right, so screw all of the people of modest means, huh?

If you are smart enough and plan ahead, property tax should never be a problem. Home equity of your primary residence should be less than 50% of net worth when you retire, and rent/dividends are more than enough to cover the property tax.

If you don't save, you can sell the house and downsize when you retire. If you insist living in the house, you can always apply for reverse mortgage or HELOC.

Those who are whining are both dumb and greedy. They happily sit on the huge gain of home equity, want to pass down the whole house to children, but are not willing to pay the cost.

House are properties with great externality. If you don't move out, other people cannot move in. Dumbs and greedies are not getting screwed, but they are trying to screw all the young people of modest means who are looking for a home.

[Wittgenstein's Ghost]

Originally Posted by albert648

Yes. What's the alternative? California's on the other end of the spectrum with Prop 13. No one can even get on the housing ladder in the first place because 1) overbearing government makes it impossible to build to begin with (no new supply), and 2) Prop 13 disincentivizes retirees who should be selling out and moving on from selling (supply through churn). No one forced anyone to do anything. Someone who owned a home for 30 years should be more than capable of foreseeing that property taxes can double in another 20 years.

Yes, there are only two option. Texas or California. There's nothing in between.

Originally Posted by albert648

The issue is a self-inflicted one (not doing something about it when there's a resolution). A house, when fully paid off and rented out, is generally cash-flow positive provided it's not in a horrible location. They don't even need to sell the place, just rent it out and go rent something else. The rent income should be sufficient to cover the rent on the smaller place and the property taxes. Hell, take out a reverse mortgage on the higher appraised value for all I care. If all else fails, move to another lower cost of living state. I hear Florida's extremely popular among retirees, as are Arizona/Nevada. If they choose not to avail themselves of those options, what else can you do?

What else can one do? Well, we could have a taxing system that is tied to income instead of property values. But either way, the only question here is whether this can "create issues" for some retired people. Moving to another state is, without question, creating an issue. End of story.

Originally Posted by jiping

If you are smart enough and plan ahead, property tax should never be a problem. Home equity of your primary residence should be less than 50% of net worth when you retire, and rent/dividends are more than enough to cover the property tax.

If you don't save, you can sell the house and downsize when you retire. If you insist living in the house, you can always apply for reverse mortgage or HELOC.

Those who are whining are both dumb and greedy. They happily sit on the huge gain of home equity, want to pass down the whole house to children, but are not willing to pay the cost.

House are properties with great externality. If you don't move out, other people cannot move in. Dumbs and greedies are not getting screwed, but they are trying to screw all the young people of modest means who are looking for a home.

And what if you aren't smart enough? There are plenty of regular people who don't have $2 million in their 401k and don't have a cache of rental properties. I'm not sure a good system kicks them out of a house they already own when they retire because they can't afford the taxes down the road.

But again -- and I think you and the other poster are missing this -- the only thing we are discussing is whether this can create issues for retired people. I don't know how either of you can be at this point in the disucssion and not think this can create issues for retired people. Maybe they should have saved more. Maybe they could move out of state. But neither of those matter -- there is an issue.

And the 75 year old is dumb and greedy because he doesn't want to move out of the house he has lived in for the last thirty years? Dear lord. Heaven forbid you should get old.

[jiping]

Originally Posted by Wittgenstein's Ghost

And the 75 year old is dumb and greedy because he doesn't want to move out of the house he has lived in for the last thirty years? Dear lord. Heaven forbid you should get old.

While his house appreciate say from $175K to $400K, he has contributed nothing to the society in this process, except for paying property tax and supporting local schools and police. Every penny of the $225K he gains by doing nothing, is an extra penny a young couple has to pay for basic housing needs.

Unless you sign an affidavit that you will give up and donate all the gains when you pass away. Well in that case you are better off applying for reverse mortgage and use it to cover tax. All problems solved.